Managed care programs facing headwinds

Most states are considering managed care plans. Managed care plans are designed to reduce the cost of health care to populations that will be in the health system repeatedly like the disabled or elderly by setting forward a defined approached to care ahead of time. CivSource has previously reported on such moves on a state-by-state level, however, population and health care trends are now converging to put new pressures on managed care and the states.

Under federal health care reform, states have the opportunity to take federal funding for Medicaid expansion. This funding can help offset some of the costs in a managed care framework, as the managed care patient population is also often part of the Medicaid population. Outside of this funding, states may face an uphill battle. Sequestration made significant cuts to state aid outside of Medicaid, leaving little budgetary wiggle room. Tax revenues following the crisis ticked up slightly, but remain flat overall, relative to pre-crisis levels.

Over the next 10-20 years, health care spending is poised to at least double as a share of the economy as the “silver tsunami,” gets underway. According to census data, approximately 6 out of every 10 baby boomer retirees will have a chronic disease, making them a candidate for managed care plans. Many of these seniors will want to age in their own homes as well.

While these trends are consistent nationally, the way states are handling them is not. “By next year half of the states will implement managed care programs, but what we are seeing is a complete lack of consistency from state to state in those programs. There are no consistent data collection requirements, or focus on outcomes. The lack of consistency is also requiring more out of technology systems in terms of being flexible and responding to rapidly changing situations,” explains Tonya Harmon, CEO, CareDirector USA, a company which provides technology solutions for managed care frameworks in an interview with CivSource.

“Just as an example, standards in Arizona have changed in just the last month, forcing some providers to report who haven’t reported before, and forcing shared services with companies that haven’t reported, that was something I hadn’t seen in the last 20 years.”

She notes that the state of Wisconsin is going still a different way and recommending services through libraries and other organizations to fill gaps in care and information outside of the health care system. Each difference in approach only adds complexity to an already indecipherable national health care system.

More veterans than ever before are also entering the health system after 12 years of multifront wars, adding pressure to an already troubled veterans benefit system as well as state health care systems in the states where they live. “More autistic children are entering the workforce than we have seen as well, and plans will need to be in place for them,” Harmon notes.

By next year, 26 states are projected to have some type of managed care plan in place each with their own technology systems. At a macro level, this means 26 states are closer to eliminating more outmoded paper-based processes from their agencies. At a micro level, this means 26 states have increased spend, change management, training, and procurement cycles to move through, all of them different.

“The type of technology being implemented today is much more flexible. If you go back 16-17 years ago, you couldn’t respond the way you can now without going back into a software development cycle. Now, you don’t have to do that, because you have less customization. That said, it still takes time initially to implement – it may not take years, but it will still take a year, that’s less about the technology and more about business process,” says Michael Dolan, CEO, CareWorks Limited.

Cloud first

Much like other parts of health care reform managed care plans are moving to cloud based, services that are largely off-site. Cloud services give state offices that ability to scale up on-demand. On the front end, managed care services are coming in the form of self-service online portals, and smartphone applications.

“Much of the managed care system now, is driven by government decisions. We believe that with a movement toward social care, and self-directed services, patients can start making active decisions about their care, instead of just accepting benefits as given,” Dolan says. “There is a drive on the IT side to bring costs down, with these kind of solutions.”

This push from IT may also improve quality of care downstream, by requiring fewer in-appointment minutes to be spent on paperwork. According to CareDirector, when technologies like patient portals are in place, doctors can spend 25% more time with patients on care and not on forms – however providers themselves have to be online too.

“On the provider side, if they don’t automate, they’re going to be out of business. These technologies give states the ability to serve more people with the same resources, but all the pieces have to be there,” Harmon says.